The special nine per cent VAT rate for the hospitality sector is set to be extended.
As reported in the Irish Examiner, the plan is to be confirmed at Tuesday's Cabinet meeting with Minister for Finance Paschal Donohoe bringing the proposal forward.
The nine per cent VAT rate was introduced in 2020 when the hospitality sector was taking significant losses due to Covid-19 restrictions.
The special VAT rate, which was due to expire at the end of August, was previously extended in last October’s budget.
However, due to the soaring cost of living and high rates of inflation, Mr Donohoe is looking to extend the lower rate for a yet to be determined length of time.
Recently, Mr Donohoe told the Dáil that extending the lower rate until the end of 2023 would cost in the region of €500 million, with a shorter extension not being as costly.
According to the Irish Examiner, the extension may only last until the end of the year.
With the special rate due to cease in August, members of the hospitality industry have been calling for an extension.
In April, Minister for Tourism Catherine Martin commented that she was seeking for the reduced rate to be extended.
